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Why you should partner with a technology-focused 3PL

The decision to partner with a 3PL may be an easy decision for your brand, but it’s important to understand that not all 3PLs are alike. This is particularly true when it comes to the use, or lack thereof, of technology. 

As the world becomes more technologically advanced, 3PLs who want to stay competitive need to utilize, build, and offer an array of advanced technology to their clients. But not all 3PLs are embracing the opportunity to invest in technology and the benefits it provides to their customers. 

In this article, we’re delving into the types of technology you should look for in a 3PL, why these technologies matter, and the benefits they offer.

Types of 3PL Technologies

We’ve all heard about the importance of data-driven decision making and gaining advanced insights through technology. But which technology actually matters for your business when it comes to partnering with a 3PL? 

We’ve organized fulfillment technology into three categories that explain their role in the fulfillment process and opportunities they create for your brand:

1. Warehouse and Operations Management

Warehouse Management System (WMS)

A warehouse management system (WMS) can be considered the “brain” of a 3PL and is largely responsible for managing the flow of information throughout the operation. A good WMS is an essential component of a company’s distribution strategy, especially in the increasingly complex world of omnichannel fulfillment.

Many software tools, such as business intelligence or multi-channel selling platforms, will be connected to your WMS to maintain a real-time flow of data. This is why it’s so important to partner with a 3PL that uses a robust, technologically-advanced WMS. 

A brand that is giving all of its business to an external provider is advised to take on their 3PL’s WMS, rather than bringing their own. Not only is it a low-cost solution, it also allows for extensive customization to meet the client’s needs. Moreover, it more easily permits system changes as a brand’s needs evolve. 

In sum, flexibility and responsiveness are two key traits that every brand should be looking for in a 3PL’s WMS. For example, a change in a brand’s business model from wholesale to direct-to-consumer ecommerce requires a completely different approach to storing SKUs. A 3PL partner that can accommodate those changes quickly is indispensable.

The Whiplash platform is a high-powered WMS that puts real-time management capabilities in the hands of both emerging and established brands. From tracking orders to SKU management and custom inventory alerts, you can get a complete overview of your fulfillment operation in just a few clicks.

Order Management System (OMS) 

But while OMS and WMS are talked about interchangeably, they play different (though overlapping) roles within the fulfillment process. Order Management Systems (OMS) are typically focused on the pick and pack functions of order fulfillment, or more simply, the process of fulfilling orders. 

An OMS helps to streamline the fulfillment process in several key ways:

  1. Automating manual and repetitive tasks. 
  2. Integrating with other management systems or ecommerce platforms for real-time inventory visibility.
  3. Reducing the likelihood of errors in the fulfillment process.
  4. Providing warehouse staff with instructions on how to execute picking/packing.

Like a WMS, you may find that a potential 3PL already has a solution in place that provides additional support. The Whiplash platform, for instance, offers the Order Rules functionality, which enables brands to automate custom packing and routing rules for different types of orders. 

Ecommerce integrations

A management platform is only ever as good as its integrations with other vital systems. The back-end of the average retail ecommerce operation is made up of multiple building blocks across channel management, reverse logistics, payment processing, analytics, and more in order to deliver a seamless customer experience. If your building blocks don’t fit together seamlessly, you’re not going to have a reliable foundation for your fulfillment process.

Open APIs for both pre-built and custom integrations are essential to support the rapid scaling of your fulfillment operation and ensure that information is communicated without costly delays that could affect delivery timeframes. Partnering with a 3PL that can support a multitude of integrations opens up fresh opportunities for your business to evolve and streamline its capabilities in developing areas.

Whiplash boasts both integration and strategic partnerships with a variety of best-in-class brands across the ecommerce landscape, from Shopify and Skubana to Returnly and Recharge. Best of all, our partner ecosystem is always growing to put the latest ecommerce technology at your fingertips.

Returns management

Returns are a thorn in the side of most retailers – and for good reason. Challenges arise in processing returns quickly to get items back on the shelf for resale, getting consumers to follow return order instructions, and ensuring that inventory levels reflect the latest returns activity. This can make reverse logistics very cumbersome for 3PLs and their clients.

In recent years, more returns management systems have been introduced to the marketplace that focus on seamlessly connecting customers, brands, and 3PLs to provide a straightforward, fully-automated returns workflow. Deploying this solution can dramatically reduce the headache of product returns while also lowering costs.

If you don’t currently have a returns management platform at your business, it’s worth finding out whether a potential fulfillment partner can provide these capabilities. Whiplash features native integrations with Happy Returns, Loop, and Returnly, three of the top returns management solutions in the market.

2. Freight Management

Rate Shopping 

Thanks to the acceleration in the growth of online shopping during the pandemic, the cost of shipping continues to increase. Carriers are now in the habit of applying peak season surcharges year-round to handle the operational pressures of higher small parcel volumes, resulting in additional parcel fees that can give brands a nasty surprise.

Managing these rising costs without eroding your profit margins (or having to raise product prices) is a constant battle for merchants. Bouncing from carrier website to carrier website to compare rates is a full-time job that takes attention away from generating sales or brand building. This is a key area where brands can benefit from partnering with a technology-focused 3PL. 

Some 3PLs will offer so-called ‘rate shopping’ software to identify the lowest freight rate available that fits your requirements. This type of software is best leveraged when the 3PL works with multiple carriers beyond just USPS or FedEx. The growing influence of regional carriers, in addition to marketplaces such as Amazon and Walmart now offering their own shipping services, offers merchants the ability to optimize their shipping strategy for cost and speed.

Whiplash’s SmartRate selection tool offers brands the ability to compare shipping rates in real-time with a range of regional, domestic, and international carriers. We analyze your order history to determine which rates can optimizes for cost while keeping transit times in line with what your customers expect. SmartRate Selection offers you the ability to set the most affordable rate as the default option for your orders, or to select different carriers for different types of orders depending on DIM weight or destination.

Order Status Tracking

Having insight into which carriers and service levels your orders are being shipped with, where they are in transit, and the orders’ final destination is highly valuable information for your brand.

If a customer files a support ticket, or an order is unable to be fulfilled due to insufficient inventory, it’s vital that your team is able to quickly retrieve this information and understand what went wrong. A lack of visibility into the status of orders is responsible for a higher rate of order errors and customer dissatisfaction, both of which can damage your brand’s reputation.

The Whiplash platform allows a merchant to filter, edit, pause, and cancel all outstanding orders via the main dashboard for complete visibility and control over your orders.

3. Communications and data analysis

Proactive communications with customers

Today’s customers expect regular updates from brands throughout the post-purchase phase, especially when it comes shipping and delivery. Not hearing from a merchant on a regular basis can spark delivery anxiety in customers, which can damage trust and confidence in your brand. 

This is why a prospective 3PL partner should enable your business to maintain a continuous flow of communication with customers, without adding endless admin duties to your team.

The Whiplash platform offers brands the ability to set up custom-branded post-purchase communications that fire automatically when an order ships, allowing you to ensure brand consistency throughout the post-purchase experience.

Order Input and EDI

3PLs should have tools available to their clients to help with manual order input as needed. This can be a fail-safe if a client’s order management system isn’t functioning correctly or if a customer calls and needs help placing an order.

Additionally, many brands also sell through wholesale channels, many of whom require order placement and processing information using Electronic Data Interchange (EDI) formatting. If wholesale is a key segment of your business, you should look for a 3PL that specializes in providing EDI software that facilitates the connection points between sellers and their retail customers. 

Apparel brand Tuckernuck came to Whiplash with a totally customized back-end, meaning that a custom integration had to be built completely from scratch:

tuckernuck logo

“Tuckernuck’s onboarding process was a lot more complex than many of our other customers because they were bringing in a custom ERP, shopping cart, and return management system. This required our team to build a custom integration solution so that all of their systems could connect seamlessly to the Whiplash platform and maintain a flow of real-time data.”

Brian Weinstein, Senior Vice President of Business Development at Whiplash

The result of these efforts? Tuckernuck went from orders taking 7-10 days to be processed and shipped to just 48 hours, enabling them to guarantee 3-4 day delivery to all of their customers. 

Find a 3PL With the Right Technology Solutions

green and blue tinted image of inventory page

Technology will continue to grow in importance for the logistics industry. The main takeaway is to make sure your current 3PL is a robust user of technology solutions. If they don’t have plans to become one, it may be time to consider other options. The benefits, both qualitative and quantitative, are far too significant for brands to ignore. As a technology fronted and focused 3PL, Whiplash is the ideal partner with forward-thinking brands who are looking for a competitive edge in an increasingly crowded retail ecommerce marketplace. After you’ve tackled the technology focus, here are 21 more questions to ask a third party logistics company.    

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